A sudden collapse of the Singaporean oil dealer Hin Leong Trading has sparked a new legal dispute between one of Hin Leong Trading's banks and a trading rival.
Winson Oil filed a case against Oversea-Chinese Banking Corp (OCBC), in order to get money for fuel it sold to the struggling dealer that the bank had financed.
According to court records, the Singapore lender claims it is not obligated to pay Winson because it has "severe questions" regarding the documentation and cargo underpinning the credit transaction provided by Hin Leong.
An application for an injunction by Unipec Singapore to prevent Credit Agricole from paying Hin Leong for a cargo of diesel was denied by a Singapore court just a few weeks prior to the Winson suit.
Similar allegations of fraud were made by the Chinese oil dealer against Hin Leong, which failed, when its legendary founder Lim Oon Kuin revealed the business had concealed millions in losses and sold fuel that had been pledged as collateral for loans. Nearly $4 billion USD is due by the dealer to 23 banks, including OCBC.
Winson claimed in a statement submitted to the High Court of Singapore that OCBC, the second-largest bank in Singapore by assets and market capitalization, had failed to pay US$30.4 million from a letter of credit it had provided to fund a diesel trade for Hin Leong.It asserts that Winson has suffered loss and damage as a result of the payment's breach.
Koh Ching Ching, an OCBC spokesman, declined to comment. Emails requesting comments from Winson and Hin Leong received no response.
According to Winson in the court record, the OCBC granted an irrevocable letter of credit for Hin Leong in his favour. The letter of credit was set to expire on June 2 since OCBC missed the May 18 payment date.
OCBC informed Winson via email on April 23 that the bank would not be honouring the letter of credit.
OCBC was reported in Winson's statement as saying, "There are major issues concerning the legitimacy of the documents given to us, the transaction contemplated therein, and/or the existence of the cargo that is to be pledged to the bank."
In the message, OCBC claimed that Hin Leong had acknowledged carrying out "fraudulent paper transactions" for the transaction.
In April, Winson Oil declared that it had no outstanding accounts receivable with Hin Leong.
About Winson Oil
Winson Oil is one of Asia's top oil trading organisations with more than 50 years of experience. Hong Kong, Bangalore, and the Philippines are just a few of the locations where Winson Oil maintains offices around Asia. Winson Oil Trading Pte. Ltd. provides supply chain services, oil trading, bunkering, onshore oil tanks, boats, shipping service distribution, and logistical planning. With a commitment to customer satisfaction, we are committed to promising our clients outstanding service. We will always strive to strengthen our commercial partnerships with our partners by acknowledging their efforts and indisputable contributions.
Winson Oil is happy to conduct business in an ethical manner and to employ cutting-edge technology and other resources wisely to reduce any potential environmental harm.
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